Make free apps pay off: Top monetizing strategies

Many organizations looking to create an application fret over one simple decision: Should the program be free to download, or should a fee be attached to ensure a return on investment?

In the current mobile environment, users are downloading free apps much more often than those they have to pay for. In fact, Gartner research stated that within the next three years, 95 percent of all applications downloaded will be free, Bloomberg Businessweek reported. This is nearly a 90 percent increase from last year's findings.

While companies and developers may worry that a free app will not generate enough profits to make their investment in it worthwhile, there are several key strategies groups can leverage to make a free app pay off.

Start in the development process: Utilize HTML5The first step in creating a profitable application is to select the best component suite and coding language that will ensure the project doesn't go over deadline or budget. These days, a larger number of developers are utilizing HTML5 despite the fact that it is such a new concept in app creation. The language provides a number of time and cost saving benefits, not the least of which is its cross-platform compatibility. Instead of wasting additional funding and working days on establishing code for every device and operating system, developers can utilize HTML5 to create code that will function effectively on Android, iOS, Windows Phones and other platforms. This approach will guarantee a better return on investment in the long run, as less resources were utilized to establish an effective program in the first place.

Built-in advertisementsAnother route app owners like to take to generate revenue is to include advertisements in the application. TechCrunch noted that the amount spent on ads, both on the mobile and desktop platforms, is steadily increasing.

BlueCloud Solutions noted, however, that ads are only effective if the app has enough traffic to sustain them.

"If you're looking to make money, you can expect to make around $2 if you get 100 downloads," BlueCloud Solutions contributor Carter Thomas wrote. "When you start getting traffic, it can be a terrific (and consistent) revenue source."

While it may be a slow process in the beginning, paid advertisements can be a beneficial money-making strategy once the program has an established following.

Create free and paid versionsTechCrunch also suggested establishing two different versions of a single app: a free version, as well as a more robust app that users pay for. This is another area where the use of HTML5 pays off. Paid versions typically have all the features and capabilities offered in the free app, but build upon these with even more functionality and expanded abilities. In this way, developers can leverage the HTML5 code they've already established for the free program to use as a foundation for the paid version.

This strategy - what Thomas calls "the freemium upsell" - has advantages for both the app owners and users.

"It's kind of a feeder system," Thomas wrote. "[U]sers can download your free app and get a sense of what you have to offer, then they can easily purchase the full version (which will have lots more functionality and game play)."

In this way, the user can benefit from utilizing the free version, but is then enticed into paying for the upgraded application. Furthermore, with the HTML5 foundation, developers are more than prepared to provide several versions of the program for users. TechCrunch also noted that this kind of two-pronged approach has been utilized by many large organizations, which have found success by offering both free and paid applications.

Overall, there are several ways to create a win-win situation between a free app and its users, and HTML5 is often the key.